1 PERSONNEL SERVICES OR BUDGETING FOR STAFF. 2 Personnel Services May take up to ¾ of recurring operating costs It is one of the easiest items to budget.

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Presentation on theme: "1 PERSONNEL SERVICES OR BUDGETING FOR STAFF. 2 Personnel Services May take up to ¾ of recurring operating costs It is one of the easiest items to budget."— Presentation transcript:

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2 Personnel Services May take up to ¾ of recurring operating costs It is one of the easiest items to budget accurately and completely With a system is in place, yearly planning is simplified A good system will strengthen capacity to manage staff size and growth

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3 COUNTING STAFF -- OPTIONS 1. Head Count. 1. How many individuals received pay during a month/year -- Head Count. OR 2. Full Time Equivalent Staff 2. Measure of full time work needed to accomplish a task -- Full Time Equivalent Staff. Which is a better indicator of effort?

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4 STAFF MONTH/YEAR A Staff Month is defined as one full calendar month of paid employment (174 paid hours) –Includes, overtime and all paid leave. 12 Staff Months equal one FTE Staff Year Faculty and Students are based on different factors

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5 COMPUTATION Days in a Year 365 Less: Weekends (52X2) 104 Paid Days in Year 261 Times: Work Hours in a Day 8 Paid Hours in a Year 2088 Divided By: Months in a Year 12 Average Paid Hours in a Month 174

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6 EDUCATION FTES Number of school days in year 180 Students: Number of hours per day in class 5 One student FTE (hours/year) 900 Faculty: Number of hours per day at school 8 One faculty FTE (hours/year) 1440

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7 WHY USE FTEs? Better indicator of actual effort. Necessary when moving to Program or Results Based Budgeting Can be used to assess staffing efficacy Linked with position control can control staff growth Where demands are made to reduce staff levels can aid in planning smooth process

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9 Personnel Services Budgeting STEP 1 Collect Data -- –How many people are working, –What are their job classifications, –What are current pay rates, –When are they due a pay increase, –What are their ID/Position Numbers, –What the FTE per position is expected (including overtime)

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16 NOTES Each budget organization should prepare the Personal Services worksheets. Excel greatly simplifies the process First year is most difficult – after that becomes almost routine

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17 VACANCIES/NEW POSITIONS Every vacant/new position must listed. Estimate when position will be filled. Use standard rate of pay for the position. If there is a range of pay, use the middle amount. Assume the most common case for the amount of benefits and other pay adjustments.

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18 Budgeting for vacant/new positions Determine amount of pay. Determine benefits. Calculate amount of year to be worked, i.e., percentage or fraction of year left if hired mid year. September through December is four months = 4/12 (or 1/3, or 33.3%) of a year.

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19 During budget execution You receive monthly and cumulative reports from the budget organizations you are responsible for. What do you do with the information? You might ask the following questions:

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20 Is the staffing pattern consistent with the budget plan? Does the staffing pattern follow known seasonal trends? Are vacant and new positions filled as planned? Is the overtime excessive? Are projected staff years within plan? If you can not answer the questions to your satisfaction then talk to the budget organization!

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22 SUMMARY Personnel budgeting and position control are necessary for good management. A good personnel budgeting system adds transparency and deters corruption. Initial work to establish system is time- consuming; future efforts become almost routine. Analysts need to objectively assess the information not second-guess managers.